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Plain English

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Submitted By legman
Words 1268
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|Plain English Examples |Appendix B | |
| | | |

This appendix contains “before” and “after” examples from participants in the Division of Corporation Finance’s plain English pilot. The Division’s staff added marginal notes to show how aspects of the plain English rules apply to specific documents.

These annotated examples are excerpted from the booklet, Before & After Plain English Examples and Sample Analyses, prepared by the Division

of Corporation Finance. Although we revised the presentation and wording of the marginal notes in this appendix, the filings remain identical to those from the booklet. To get a complete copy of the book-let, please call the SEC’s public reference room at (202) 942-8090.

Differences between the proposed and final amendments to Item 501

When the issuers prepared these documents, they relied on staff interpretations for filings in the plain English pilot and the proposed amendments to Item 501.

The following information was not required under Item 501 as proposed, but this information is required under Item 501 as adopted:

• the market(s) and the trading symbol;

• the underwriter’s over-allotment or similar option, if applicable;

• a prominent cross-reference to the risk factors section including the page number;

• the following on a total and per share basis, if applicable: – the price to the public;

– the underwriter’s discounts and commissions; and

– the net proceeds the issuer and selling shareholders receive.

Examples for illustration purposes only

We are providing these examples and marginal notes only to illustrate the principles of plain English. We have not made any determination as to whether the filings are accurate or complete. You are responsible for the substance in your plain English filings. To understand the plain English rules fully, you must read the proposing and adopting releases:

• the proposing release—Release no. 33-7380; and

• the adopting release—Release no. 33-7497.

Both releases are available from the SEC’s Public Reference Room and our web site at www.sec.gov.

We collected many filings from the Division’s plain English pilot in one book.

You can get a photocopy of this 756-page book, Plain English Pilot Program: Selected Plain English Samples, from the SEC’s Public Reference Room or a printed copy from Bowne Publishing in New York City. (The SEC does not endorse Bowne, nor do we have a business relationship with them.)

a p l a i n e n g l i s h h a n d b o o k 69

Before MBNA cover page, core prospectus

Note: When MBNA filed this disclosure document, they relied on the SEC rules that were in effect at that time.

Fully-justified text and lengthy

paragraphs give page a dense,

block-like appearance.

Abstract terms and legal jargon

prevalent

A lot of passive voice, adding to

sentence length

Eliminate defined terms from

the cover page.

Long sentence–60+ words

Why capitalize these common

terms?

Long sentence–50+ words

Many long sentences–

40+ words

Centered text and all capital

letters are hard to read.

Legends are in legalese.

Legalistic tone–does Item 501

require all this information?

All information is presented the

same way: What does this

page focus my attention on?

Sans serif font is hard to read.

Text runs in long lines across

the page.

70 a p l a i n e n g l i s h h a n d b o o k

|MBNA cover page, core prospectus |After | |
| | | |

|a p l a i n e n g l i s h|71 |
|h a n d b o o k | |

Ample white space surrounds key information and makes page visually inviting.

Page layout highlights cross reference to risk factors.

Clear sentences are in active voice with concrete, everyday language.

No lengthy, block-like paragraphs

Information presented in three main categories:
• the trust

• the certificates

• the certificateholders

No defined terms

Common terms, like classes, are not capitalized.

Long sentences are put into bullet lists.

Left justified text and shorter line lengths are easy to read.

Serif typeface is easier to read than sans serif.

Legends in plain English and lowercase are easier to read than all capital letters.
Appendix A
Before: Premium Cigars International

Cover page

Fully justified text creates a dense, block-like appearance.

Eliminate defined terms from cover page.

Is no par value helpful information for investors?

Key information, such as price per share, is not distinguished from general text.

Cross reference draws readers’ attention away from key information.

All capital letters are hard to read.

Legend is in legalese.

Some legalese is used, like set forth and when, as and if delivered.

Offering table, references to footnotes, and paragraph following the table are legalistic.

Legalistic tone–does Item 501 require all this information?

Appendix A
After: Premium Cigars International

Cover Page

Only key information on page

Offering information is clear and easy to read.

Ample white space is visually inviting and highlights key information.

Key information, like price per share, is highlighted.

Left justified text eliminates block-like appearance.

Two-column format is easier to read than text running across page.

Design and layout highlight market and trading symbols.

Short sentences use concrete, everyday terms.

Language is free from legalese, technical language, and unnecessary cross references.

Personal pronouns, while not required, enhance readability.

Legend is in plain English.

|Before |General Motors Corporation, summary | |
| | | |

Legalese and technical terms,

like pursuant to the terms

and conditions set forth, and

effected largely pursuant to

transactions, etc.

Cross reference to definition

disrupts flow of information;

meanings of terms in summary

must be clear from context.

Terms like certain and

appropriate are vague, not

concrete.

Passive voice–who is

completing these transactions?

Parenthetical phrases are

legalistic and disrupt flow of

information.

Little “i”s are legalistic; bulleted

list would be easier to read.

Organization of information

driven by mechanics of

transactions rather than by

information shareholders need

to make a decision.

Transactions’ effect on share-

holders not discussed until

column two.

Is detail about GM amending

its certificate of incorporation

necessary for the summary?

74 a p l a i n e n g l i s h h a n d b o o k

General Motors Corporation, summary After

Information organized from shareholders’ perspectives– how transactions affect them addressed first.

Active voice helps shareholders follow the steps involved in the transaction more easily.

Summary is free of defined terms.

Concrete, everyday language replaces legalese like pursuant to the terms and conditions

set forth and effected largely pursuant to transactions, etc.

Numbers are more reader-friendly than little “i”s.

Easy to read two-column format with left justified margins.

Personal pronouns, although not required, help engage shareholders’ attention.

a p l a i n e n g l i s h h a n d b o o k 75
Appendix A
Before: Baltimore Gas & Electric Company

Section from body of prospectus

Paragraphs are lengthy and block-like. Subheadings are helpful, but more would be better.

Defined below? Where is below?

Cross reference not helpful.

Long sentence–85+ words

Many defined terms with definitions elsewhere.

Can you make meanings clear from context?

Long sentence–90+ words

Lists embedded in text; complex presentation

Appendix A
After: Baltimore Gas & Electric Company

Section from body of prospectus

Paragraphs are short and readable.

Short sentences–longest sentence is 36 words.

Two-column format and left justified text, while not

required, help make summary more reader-friendly.

More subheadings break up dense text and help readers navigate their way through information easily.

Defined terms are minimized, with meanings of terms clear from context.

Bullet lists help investors read and understand this information more quickly and easily.

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